Commentary

Tax Credits To Pay For News Has Greater Promise Than Journalism Protection Bill

by June 22, 2021

The disappearance of local newspapers, blamed on ad revenue that has plunged during the digital age, has prompted lawmakers to devise a variety of proposals to save journalism. After reviewing these bills, I favor the idea of offering tax credits to pay for subscriptions.

Reps. Ann Kirkpatrick, D-Ariz., and Dan Newhouse, R-Wash., last week reintroduced the Local Journalism Sustainability Act to provide tax credits to local newspapers, subscribers and advertisers for several years. The package would let readers save on their tax bill when they pay for a subscription to a local newspaper and give news organizations credits for hiring journalists.

Because the newspapers and journalists would have to be focused on local news to qualify for the credits, smaller publications that aren't part of a bigger newspaper group would benefit. The tax incentives also are flexible enough to allow for market forces to work, letting readers decide whether they want to subscribe to a local newspaper.

Ideally, the plan will encourage people who don't typically subscribe to a local newspaper to become longer-term customers. Those news providers will still have to provide quality journalism about their communities and find other ways to engage readers, especially if the tax credits aren't renewed.

Still, the bill is more feasible than the Journalism Competition and Preservation Act of 2021 that's facing mounting opposition. That bill would provide news organizations with a four-year exemption to antitrust regulations. As a result, those content providers could engage in collective bargaining with digital platforms, such as Google and Facebook.

The News Media Alliance, a trade group that represents thousands of news providers, and multiple large newspapers support the bill. They argue that big tech companies have demonetized journalism by capturing a significant share of the U.S. digital ad market. Google and Facebook have dismissed those claims, pointing out that they provide value to publishers in the form of referral traffic.

Much of the latest criticism of the JCPA focuses on whether it would harm smaller publishers that couldn't negotiate better business terms with digital platforms. Last week, digital rights group Public Knowledge joined the chorus of opponents to the JCPA. It argued the bill may bolster "existing power relationships in media."

Journalism professor Jeff Jarvis, who works at the Craig Newmark Graduate School of Journalism at the City University of New York, echoed those concerns in written testimony to Congress. Granting an antitrust exemption to newspaper owners could “entrench the interests of the largest companies on both sides of the table, media and technology.”

That concern also has been echoed by conservatives, including Sen. Marco Rubio, R-Fla., Sen. Marsha Blackburn, R-Tenn., Rep. Jim Jordan, R-Ohio and House Republican Leader Kevin McCarthy. They fret that Big Tech and Big Media will collude to censor independent publishers.

The mounting opposition to the JCPA makes the proposal less feasible than a system of tax credits that offer a way to help local journalism and give people greater choice in which publications they want to support.

government, newspapers

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